Deal makes IBM the keeper of the world's largest open source software portfolio.

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This is no trick, and whether it's a treat remains to be seen: IBM and Red Hat executives announced Monday that IBM is acquiring the open source software and cloud services company in a $34 billion cash deal.

Red Hat will remain a standalone business unit within IBM, and an IBM spokesperson said that IBM "will remain committed to Red Hat’s open source ethos, its developer community and its open source community relationships." Red Hat will maintain its current leadership team and remain in its current headquarters and facilities. The culture will remain as well—though it's possible IBM and Red Hat may cross-pollinate a bit more than they have in the past.

In a webcast, IBM Senior Vice President of Hybrid Cloud Arvind Krishna and Red Hat Executive Vice President and President of Products and Technologies Paul Cormier echoed the spokesperson's statement, stating that all of Red Hat's existing partnerships with other cloud providers and all of Red Hat's open source development projects—including Red Hat Enterprise Linux, the OpenShift implementation of Kubernetes-based containers, and the OpenStack cloud computing platform—would continue as before. Likewise, Krishna said that IBM would continue its partnerships with other Linux distributions.

Considering Red Hat's position as the leading Linux distribution provider in the business world, as well as the top operating system provider for cloud computing, that's probably a very good idea. IBM has long been a partner with Red Hat, even porting Red Hat Enterprise Linux (RHEL) to its mainframe platforms. RHEL, Krishna said, is the top operating system on IBM's z System mainframes, and that has been driven largely by customer demand to run the services supported by RHEL in a mainframe environment. And over the past 16 years, Red Hat's culture has shifted from being a commodity Linux distribution toward something more like IBM's corporate culture.

"We're not an open source company," said Cormier. "We're an enterprise software company with an open source development model. Red Hat's secret sauce is we've put those two things together. And we've both done that—IBM has a huge history of enterprise-grade software and open source development. The reason why [Red Hat] moved product and engineering to the Boston area is because we wanted engineers who had worked on enterprise products."

For IBM, the acquisition is about growing IBM's business in the cloud—private, public, and hybrid—based on the position of the company as the open source and open standards player versus the "proprietary" models of Microsoft, Amazon, and other major cloud players. For Red Hat, the deal is about scaling up the company's reach. "We can scale at greater speed," said Cormier, "not just from a Kubernetes perspective, but even with the RHEL base. We can only reach a certain number of customers right now."

Because IBM is counting on open source to cement the company's credibility as a cloud player, it's doubtful that the fallout of the acquisition will follow the path of, say, the Oracle acquisition of Sun. IBM has a good track record with open source—the Eclipse development platform and other contributions to Java, for example, as well as IBM's royalty-free patent contributions to the Open Invention Network to support development of the Linux platform. So this may be a good thing. Right?

Of course, the SCO-IBM lawsuit is still going, so that's a thing. IBM has a countersuit against SCO (suing over IBM using Unix stuff in AIX) that claims SCO (then Caldera) "copied and distributed hundreds of thousands of lines of IBM code, which IBM contributed to Linux under the GPL, after SCO lost permission to do so by repudiating and breaching the GPL. "

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Sean Gallagher
Sean is Ars Technica's IT and National Security Editor. A former Navy officer, systems administrator, and network systems integrator with 20 years of IT journalism experience, he lives and works in Baltimore, Maryland. Emailsean.gallagher@arstechnica.com//Twitter@thepacketrat

258 Reader Comments

This could go either way, though I hope they stay ethical. Just because a piece of software is open-source doesn't mean it respects the freedoms of the users. If they remain open-source but have a limited form of GPL 3 (like Linus does with the kernel), the only thing keeping it Libre is their current opinion on the topic, even if it remains open-source. At any point they could "go evil." I had much more confidence in Red Hat than I do with IBM.

Paying such a premium usually does not bode well for anyone other than a handful of major investors. We will see... Hopefully they will do well (and good).

For IBM, the acquisition is about growing IBM's business in the cloud—private, public, and hybrid—based on the position of the company as the open source and open standards player versus the "proprietary" models of Microsoft, Amazon, and other major cloud players.

I dont understand this part of the article - how is IBM's cloud more open and in what way are the MS/Amazon/Google/Etc. clouds closed off?

In all cases, you can run Windows and various forms of Linux in the "closed" clouds, and I would assume IBM's way of selling and offering services is roughly equivalent to the others. So in what way are they more open? Do they deal only in Linux so they are more "open" for being so focused on open-source OS's? That would see more closed to me, as in less options vs more options, even if somehow IBM supports more open source software than the rest.

I guess if MS only allowed Windows, Amazon only allowed their version of Android and Google only allowed their version of Android, that line would makes sense, but you can basically run almost anything on any of these services (even if MS pushes Windows and other MS software a lot - because of course they or anyone with their own stuff would).

This could go either way, though I hope they stay ethical. Just because a piece of software is open-source doesn't mean it respects the freedoms of the users. If they remain open-source but have a limited form of GPL 3 (like Linus does with the kernel), the only thing keeping it Libre is their current opinion on the topic, even if it remains open-source. At any point they could "go evil." I had much more confidence in Red Hat than I do with IBM.

Paying such a premium usually does not bode well for anyone other than a handful of major investors. We will see... Hopefully they will do well (and good).

While this certainly could go either way overall, the open source story is not really in doubt. IBM has been a large contributor to major open source projects for decades

I think it would have been a great buy for Microsoft. Windows is less important than it's ever been. They aren't rebuilding .NET into .NET Core for no reason. MS SQL is running on Linux... at this juncture, I think Microsoft knows they need Linux more than Linux needs them so they probably would be better stewards of RH than IBM will.

I have the feeling this is analogous to Oracle buying Sun. They just want more line items to bill for.

Then, will Microsoft or Google will buy Canonical ltd, company behind the Ubuntu Linux? It seemed improbable before this deal, but I changed my mind. Someday, Ubuntu also will be sold to other major software giant like Google or even MS.

At this point, if it happens, I would rather see Microsoft do that. All Google does is buy out or start internal projects. They have hundreds of projects that never gained any real footing. And they don't look very committed to maintaining any of their project. They already have bunch of OSs.

3) What does IBM get out of it? I would imagine, instantly, they can offer "Full Red Hat support" with every machine they sell. And they can raise rates for competitors significantly. Oh dear, HP - your storage cluster doesn't come with official Red Hat Support for that price? And it would cost you $50k/node/year? So sad.. Guess we'll just take our business over to IBM. They cost 20% more initially, but Red Hat support is only $500/node/year.

Wouldn't that be considered anti-trust law breach?

I don't know - is IBM the dominant player in any industry? And I would imagine they're free to charge whatever price they want for ANY external company to re-sell support rights. They don't have to put any price on it internally, since it's free.

Can you force Microsoft to sell Windows Enterprise OEM licenses at a specific price?

(I'm not saying I'm 100% correct here - just brainstorming - I could very well be wrong)

I used to work at IBM. Boy are you wrong about internal sales. IBM charged IBM exorbitant prices for EVERYTHING. For instance I wanted a second laptop power adapter because I kept forgetting mine at home. My boss's boss was livid. My boss was like "Have you any idea how much those COST????!!!!!! $80!!!!!"

I was like "You're JOKING right? That's the LIST price. It doesn't cost IBM $80 to make a power adapter. Most like $10, $20 MAYBE. And since they are selling it to themselves, it doesn't really cost anything does it?"

It was like talking to a brick wall. IBM was NOT going to pay for ANYTHING that they weren't forced to. Need something? Too bad! Do without!

That's the IBM way. It's a wonder IBM can stay in business with how much IBM charges IBM to do business, while being forced to use inferior IBM software that they are forced to pay themselves for. (face palm)

No good will come from this. IBM's corporate environment and financial near-sightedness will kill Red Hat. Time to start looking for a new standard bearer in Linux for business.

I agree. Redhat has dev offices all over. A lot of them in higher cost areas of the US and Europe. There's no way IBM doesn't consolidate and offshore a bunch of that work.

This. To a bean counter a developer in a RH office in North America or Europe who's been coding for RH for 10 years is valued same as a developer in Calcutta who just graduated from college. For various definitions of word 'graduated'.

I'm just waiting until some major company decides that some of the nicer parts of middle America/Appalachia can be a LOT cheaper, still nice, and let them pay less in total while keeping some highly skilled employees.

I don't know about that. Cities can be expensive but part of the reason is that a lot of people want to live there, and supply/demand laws start acting. You'll be able to get some talent no doubt, but a lot of people who live nearby big cities wouldn't like to leave all the quality of life elements you have there, like entertainment, cultural events, shopping, culinary variety, social events, bigger dating scene, assorted array of bars and night clubs, theatre, opera, symphonies, international airports... you get the drift.

I understand everyone is different, but you would actually need to pay me more to move to a smaller town in middle America. I also work with people who would take the offer without hesitation, but in my admittedly anecdotal experience, more tech people prefer the cities than small towns. Finally, if you do manage to get some traction in getting the people and providing the comforts, then you're just going to get the same increase in cost of living wherever you are because now you're just in one more big city.

Costs of life are a problem, but we need to figure out how to properly manage them, instead of just saying "lets move them somewhere else". Also we shouldn't discount the capability of others, because going by that cost argument outsourcing becomes attractive. The comment you're replying to tries to diminish Indian engineers, but the reverse can still be true. A developer in India who has been working for 10 years costs even less than an American who just graduated, for various definitions of graduated. There's over a billion people over there, and the Indian Institutes of Technology are nothing to scoff at.

There's not an intrinsic advantage to being of a certain nationality, American included. Sure, there are a lot of companies and bad programmers coming from India, but there are plenty of incompetent developers right here too. It's just that there are a lot more in general over there and they would come for cheap, so in raw numbers it seems overwhelming, but that sword cuts both ways, the raw number of competent ones is also a lot. About 5% of the American workforce are scientists and engineers, which make a bit over 7 million people. The same calculation in India brings you to almost 44 million people. A huge problem with the good developers over there is the lack of English proficiency and soft skills. However, being born or graduated in Calcutta (or anywhere else for that matter) is not a determination of one's skill.

I get what the intention of the first comment was intended to be, and that I'm taking it further than its intent, but it still has that smugness that is dangerous to the American future. As the world becomes more interconnected, and access to learning improves, when people ask you why are you better than that other guy, the answer better be something more than "well, I'm American and he is from Calcutta" because no one is going to buy that. The comment could've said that to a bean counter a solid developer with 10 years of experience is worth the same as a junior dev who just came out of school and make the same point. What exactly was the objective of throwing in Calcutta over there? Especially when we then move to a discussion about how costly it is to pay salaries in America. Sounds a bit counterproductive if you ask me.

No good will come from this. IBM's corporate environment and financial near-sightedness will kill Red Hat. Time to start looking for a new standard bearer in Linux for business.

I agree. Redhat has dev offices all over. A lot of them in higher cost areas of the US and Europe. There's no way IBM doesn't consolidate and offshore a bunch of that work.

This. To a bean counter a developer in a RH office in North America or Europe who's been coding for RH for 10 years is valued same as a developer in Calcutta who just graduated from college. For various definitions of word 'graduated'.

I'm just waiting until some major company decides that some of the nicer parts of middle America/Appalachia can be a LOT cheaper, still nice, and let them pay less in total while keeping some highly skilled employees.

I don't know about that. Cities can be expensive but part of the reason is that a lot of people want to live there, and supply/demand laws start acting. You'll be able to get some talent no doubt, but a lot of people who live nearby big cities wouldn't like to leave all the quality of life elements you have there, like entertainment, cultural events, shopping, culinary variety, social events, bigger dating scene, assorted array of bars and night clubs, theatre, opera, symphonies, international airports... you get the drift.

I understand everyone is different, but you would actually need to pay me more to move to a smaller town in middle America. I also work with people who would take the offer without hesitation, but in my admittedly anecdotal experience, more tech people prefer the cities than small towns. Finally, if you do manage to get some traction in getting the people and providing the comforts, then you're just going to get the same increase in cost of living wherever you are because now you're just in one more big city.

Costs of life are a problem, but we need to figure out how to properly manage them, instead of just saying "lets move them somewhere else". Also we shouldn't discount the capability of others, because going by that cost argument outsourcing becomes attractive. The comment you're replying to tries to diminish Indian engineers, but the reverse can still be true. A developer in India who has been working for 10 years costs even less than an American who just graduated, for various definitions of graduated. There's over a billion people over there, and the Indian Institutes of Technology are nothing to scoff at.

There's not an intrinsic advantage to being of a certain nationality, American included. Sure, there are a lot of companies and bad programmers coming from India, but there are plenty of incompetent developers right here too. It's just that there are a lot more in general over there and they would come for cheap, so in raw numbers it seems overwhelming, but that sword cuts both ways, the raw number of competent ones is also a lot. About 5% of the American workforce are scientists and engineers, which make a bit over 7 million people. The same calculation in India brings you to almost 44 million people. A huge problem with the good developers over there is the lack of English proficiency and soft skills. However, being born or graduated in Calcutta (or anywhere else for that matter) is not a determination of one's skill. I get what the intention of the first comment was intended to be, but it still has that smugness that is dangerous to the American future. As the world becomes more interconnected, and access to learning improves, when people ask you why are you better than that other guy, the answer better be something more than "well, I'm American and he is from Calcutta" because no one is going to buy that. The comment could've said that to a bean counter a solid developer with 10 years of experience is worth the same as a junior dev who just came out of school and make the same point. What exactly was the objective of throwing in Calcutta over there? Especially when we then move to a discussion about how costly it is to pay salaries in America. Sounds a bit counterproductive if you ask me.

I think a lot of the dislike for Indian developers is it's usually the outsourced, cheap as possible code monkey developers. Which can be a problem anywhere, for sure, but at least seem exacerbated by US companies outsourcing there. In my limited experience, they're either intelligent and can work up to working reasonably independently and expanding on a ticket intelligently. Or they're copy a pasta code monkey and need pretty good supervision of the code that's produced. Add in the problem if timezones and folks who may not understand English that great, or us not understanding their English, and it all gives them a bad name. Yet I agree, I know some quite good developers. Ones that didn't go to a US college.

My impression, totally anecdotal, is that unless you can hire or move a very good architect/lead + project/product manager over there so you can interact in real-time instead of with a day delay, it's just a huge PITA and slows things down. Personally I'd rather hire a couple of seemingly competent 3 years out of college on their 2nd job (because they rarely stay very long at their first one, right?) and pay from there.

I just can't comprehend that price. Cloud has a rich future, but I didn't even know Red Hat had any presence there, let alone $35 billion worth.

Yeah the price is nuts, reminiscent of FB's WhatsApp purchase, and maybe their Instagram purchase.

If you actually look at the revenue Amazon gets from AWS or Microsoft from Azure, it's not that much, relatively speaking. For Microsoft, it's nothing compared to Windows and Office revenue, and I'm not sure where the growth is supposed to come from. It seems like most everyone who wants to be on the cloud is already there, and vulns like Spectre and Meltdown broke the sacred VM wall, so...

WhatsApp and Instagram weren't priced based on the value of the companies themselves, but the negative impact they might have on the value of Facebook IMO. WhatsApp isn't worth billions, and probably never will be, but it could reduce the value of Facebook by billions. So to Facebook it's worth that amount to control it, even if it's not worth that amount to anyone else.

Which is why this purchase doesn't make sense. RedHat is a growth proposition but with a mainly US focus in a market with various players and it has a lot of growing it needs to do. What's the value to IBM unless IBM see them as a threat as much as a synergy? All cash is madness...

I don't know why you're getting downvoted. I'm a Microsoft fan. And an IBM fan. Nearly everything Microsoft acquires ends badly (Nokia, in recent memory).IBM at least has a deep unix history with AIX and I would trust them to refrain from dismantling Red Hat. Microsoft, on the other hand, would use it to wedge Windows Server in and burn RH Linux to the ground before they're done.

I don't know why you're getting downvoted. I'm a Microsoft fan. And an IBM fan. Nearly everything Microsoft acquires ends badly (Nokia, in recent memory).IBM at least has a deep unix history with AIX and I would trust them to refrain from dismantling Red Hat. Microsoft, on the other hand, would use it to wedge Windows Server in and burn RH Linux to the ground before they're done.

If you think IBM won't dismantle RH you are delusional. I don't know what they will ultimately do with the business anymore than the next outsider burning up the web since this started making the rounds yesterday evening but come on- IBM of today is not known for their victories and from what I've gathered they're not known for being a good place to work either which is the polar opposite of the environment RedHat employees portray about their jobs. I can't predict the future but let's not be naive either.

I think it would have been a great buy for Microsoft. Windows is less important than it's ever been. They aren't rebuilding .NET into .NET Core for no reason. MS SQL is running on Linux... at this juncture, I think Microsoft knows they need Linux more than Linux needs them so they probably would be better stewards of RH than IBM will.

I have the feeling this is analogous to Oracle buying Sun. They just want more line items to bill for.

IBM has been fumbling around for a while. They didn't know how to sell Watson as they sold it like a weird magical drop in service and it failed repeatedly, where really it should be a long term project that you bring customer's along for the ride...

I think they sold Watson all too well. The underlying product was not up to snuff, but the sales team did a fantastic job of capturing media coverage, corporate attention, and popular imagination.

I think that would be (selling too well when product is not up to snuff) even worse. When you launch a product that isn't reasonably good for its price and it flops in the market, you stand to lose: research cost, development cost, distribution cost and promotional cost. These are all sunk costs at that point.

But when a premature product with boost from strong promotional and sales effort gets sold well initially - at one point when the real lemon in that comes out - it flops. This time you stand to lose all the sunk cost mentioned above plus you lose much more in brand value as users share bitter experiences and in general trust you a little less than they would have if they hadn't bought said bad product for sensational sales tactics.

Having worked at IBM for a significant period of time, I think what I would be worried about the must-work-in-the-PROPER-office mandate there. How will that jive with a largely remote, distributed, open-source driven company like Redhat?

RHEL has been pretty much *the* go-to linux there for a long time, so in some ways it's not too crazy of a purchase.

My previous job (6+ years ago now) was at a university that was rather heavily invested in IBM for a high performance research cluster. It was something around 100 or so of their X-series blade servers, all of which were running Red Hat Linux. It wouldn't surprise me if they decided to acquire Red Hat in large part because of all these sorts of IBM systems that run Red Hat on them.

That was my thought. IBM wants to own an operating system again. With AIX being relegated to obscurity, buying Red Hat is simpler than creating their own Linux fork.

Notwithstanding that IBM and Red Hat already had a partnership on private cloud business, it seems IBM main focus here is to be a strong proponent of hybrid cloud management as it seems they don't have the strength to compete with MS, Amazon and Google on the public cloud market. It makes sense.

But to me that the price was over-inflated if this really is their end game.

With GDPR and similar laws a private cloud will be a lot easier sell. Maybe public one for encrypted backup but not for actual data processing. Especially with US government opinion that all data that US companies handle belongs to them it's a high risk for European companies to put any information in the cloud handled by them.

I just can't comprehend that price. Cloud has a rich future, but I didn't even know Red Hat had any presence there, let alone $35 billion worth.

Plus it's just a linux distro. Red Hat offered a nice service to companies, but big companies basically dominating the cloud business (Amazon, Google & Microsoft) will certainly not help IBM get bigger.

The moment those three drop RHEL and favour another distro, that cash as been lost. And that's a lot of cash to lose.

Of course other smaller companies may want to run away from IBM like the plague. As they should do.

This may be a good strategic move for IBM but it's definitely severely overpriced.

No good will come from this. IBM's corporate environment and financial near-sightedness will kill Red Hat. Time to start looking for a new standard bearer in Linux for business.

I agree. Redhat has dev offices all over. A lot of them in higher cost areas of the US and Europe. There's no way IBM doesn't consolidate and offshore a bunch of that work.

This. To a bean counter a developer in a RH office in North America or Europe who's been coding for RH for 10 years is valued same as a developer in Calcutta who just graduated from college. For various definitions of word 'graduated'.

I'm just waiting until some major company decides that some of the nicer parts of middle America/Appalachia can be a LOT cheaper, still nice, and let them pay less in total while keeping some highly skilled employees.

I don't know about that. Cities can be expensive but part of the reason is that a lot of people want to live there, and supply/demand laws start acting. You'll be able to get some talent no doubt, but a lot of people who live nearby big cities wouldn't like to leave all the quality of life elements you have there, like entertainment, cultural events, shopping, culinary variety, social events, bigger dating scene, assorted array of bars and night clubs, theatre, opera, symphonies, international airports... you get the drift.

I understand everyone is different, but you would actually need to pay me more to move to a smaller town in middle America. I also work with people who would take the offer without hesitation, but in my admittedly anecdotal experience, more tech people prefer the cities than small towns. Finally, if you do manage to get some traction in getting the people and providing the comforts, then you're just going to get the same increase in cost of living wherever you are because now you're just in one more big city.

Costs of life are a problem, but we need to figure out how to properly manage them, instead of just saying "lets move them somewhere else". Also we shouldn't discount the capability of others, because going by that cost argument outsourcing becomes attractive. The comment you're replying to tries to diminish Indian engineers, but the reverse can still be true. A developer in India who has been working for 10 years costs even less than an American who just graduated, for various definitions of graduated. There's over a billion people over there, and the Indian Institutes of Technology are nothing to scoff at.

There's not an intrinsic advantage to being of a certain nationality, American included. Sure, there are a lot of companies and bad programmers coming from India, but there are plenty of incompetent developers right here too. It's just that there are a lot more in general over there and they would come for cheap, so in raw numbers it seems overwhelming, but that sword cuts both ways, the raw number of competent ones is also a lot. About 5% of the American workforce are scientists and engineers, which make a bit over 7 million people. The same calculation in India brings you to almost 44 million people. A huge problem with the good developers over there is the lack of English proficiency and soft skills. However, being born or graduated in Calcutta (or anywhere else for that matter) is not a determination of one's skill. I get what the intention of the first comment was intended to be, but it still has that smugness that is dangerous to the American future. As the world becomes more interconnected, and access to learning improves, when people ask you why are you better than that other guy, the answer better be something more than "well, I'm American and he is from Calcutta" because no one is going to buy that. The comment could've said that to a bean counter a solid developer with 10 years of experience is worth the same as a junior dev who just came out of school and make the same point. What exactly was the objective of throwing in Calcutta over there? Especially when we then move to a discussion about how costly it is to pay salaries in America. Sounds a bit counterproductive if you ask me.

I think a lot of the dislike for Indian developers is it's usually the outsourced, cheap as possible code monkey developers. Which can be a problem anywhere, for sure, but at least seem exacerbated by US companies outsourcing there. In my limited experience, they're either intelligent and can work up to working reasonably independently and expanding on a ticket intelligently. Or they're copy a pasta code monkey and need pretty good supervision of the code that's produced. Add in the problem if timezones and folks who may not understand English that great, or us not understanding their English, and it all gives them a bad name. Yet I agree, I know some quite good developers. Ones that didn't go to a US college.

My impression, totally anecdotal, is that unless you can hire or move a very good architect/lead + project/product manager over there so you can interact in real-time instead of with a day delay, it's just a huge PITA and slows things down. Personally I'd rather hire a couple of seemingly competent 3 years out of college on their 2nd job (because they rarely stay very long at their first one, right?) and pay from there.

Companies/management offshore because it keep revenue per employee and allows them to promoted by inflating their durect report allowing them to build another "cheap" pyramid hierarchy. A manager in US can become a director or vp easily by having few managers report to him from India. Even better this person can go to Indian ( they are most often Indian) and claim to lead the India office and improve outsourcing while getting paid US salary.

I have dealt with this far too much these VPs rarely do much work and simply are hit on bottom line ( you are talking about 250k+), but management in US doesn't want to sit off hours and work with India office so they basically turn a blind eye on them.

I can see what each company will get out of the deal and how they might potentially benefit. However, Red Hat’s culture is integral to their success. Both company CEOs were asked today at an all-hands meeting about how they intend to keep the promise of remaining distinct and maintaining the RH culture without IBM suffocating it. Nothing is supposed to change (for now), but IBM has a track record of driving successful companies and open dynamic cultures into the ground. Many, many eyes will be watching this.

Hopefully IBM current top Brass will be smart and give some autonomy to Red Hat and leave it to its own management style. Of course, that will only happen if they deliver IBM goals (and that will probably mean high double digit y2y growth) on regular basis...

One thing is sure, they'll probably kill any overlapsing product in the medium term (who will survive between JBOSS and Websphere is an open bet).

(On a dream side note, maybe, just maybe they'll move some of their software development to Red Hat)

IBM's cloud offerings, and Oracle's for that matter, are a complete joke. Best avoided.

Very obviously why they bought out RHAT for *their* cloud offering; it's had success for mixed cloud environments (think banks etc who don't want to expose customer data to an external cloud provider but want the warm fuzzies for "getting cloudy") . Question is whether they push the IBM software stack there or keep that space using the rest of the RH suite (JBoss, Fuse, etc).

IBM has been fumbling around for a while. They didn't know how to sell Watson as they sold it like a weird magical drop in service and it failed repeatedly, where really it should be a long term project that you bring customer's along for the ride...

I had a buddy using their cloud service and they went to spin up servers and IBM was all "no man we have to set them up first".... like that's not cloud IBM...

If IBM can't figure out how to sell its own services I'm not sure the powers that be are capable of getting the job done ever. IBM's own leadership seems incompatible with the state of the world.

IBM basically bought a ton of service contracts for companies all over the world. This is exactly what the suits want: reliable cash streams without a lot of that pesky development stuff.

IMHO this is perilous for RHEL. It would be very easy for IBM to fire most of the developers and just latch on to the enterprise services stuff to milk it till its dry.

You hit it dead on - the money here is the support contracts. Oracle and SAP make something like 95% margin on their support and maintenance services, so I assume IBM is in the same ballpark. Those dollars fund the rest of the company.

Having negotiated license agreements, renewals, and a few audit settlements with both Red Hat and IBM, both companies are a pain to work with. Hopefully that means they will be great together!

Given my experiences with Websphere I'd take J++/.NET any day. I also can't seem to completely disconnect Oracle's recent move to license Java from this acquisition. Between that and the thought of IBM Websphereizing Red Hat I'll be brushing up on my .NET skills again.

A-Team at Red Hat leaving because of antiquated management style of IBM, could be what hurts RH more than just about anything else. All these orgs try to present a monolithic corporate presence and it is easy to forget they are all made up of individuals and some of those individuals are far more productive than others.

Reminds me of when Sun Microsystems bought out Cobalt Networks then destroyed the company by imposing its bureaucratic purchasing process on the organisation where as historically Cobalt sold directly to the customer or through a network of resellers. Anyone who had to deal with Sun Microsystems in New Zealand wouldn't wish the experience in their worst enemy because it was almost as though they put you through a shit test/endurance test to see whether you're 'worthy'. IBM being no better - if you want to sign up for their cloud email you have to make contact with some bureaucratic wonk who will waste hours of time where as in the case of Google I go to the G Suite website and sign up and configure everything within a few short hours.

I think it would have been a great buy for Microsoft. Windows is less important than it's ever been. They aren't rebuilding .NET into .NET Core for no reason. MS SQL is running on Linux... at this juncture, I think Microsoft knows they need Linux more than Linux needs them so they probably would be better stewards of RH than IBM will.

I have the feeling this is analogous to Oracle buying Sun. They just want more line items to bill for.

RedHat is not only Linux; they are very strong in the Java scene. This combo surely fits much better in IBM profile (a long time Java supporter) than Microsoft's (which tried to sabottage Java in the past).

EMC was purchased by Dell, did VMware die? No, of course not. It continues to operate as a standalone business and maintaining its competitive edge.

I am being very optimistic here. I don't think anyone working on RHEL or CentOS has anything to worry about; definitely not in the short term. The worst that could happen would come to fruition in the long term if at all. Too many people are jumping the gun and saying that RedHat is now dead! Oh the horror!

I had a buddy using their cloud service and they went to spin up servers and IBM was all "no man we have to set them up first".... like that's not cloud IBM...

They have been this way for a long time. Back around 2004 I was starting to develop a new lightweight virtualisation tool, which eventually became the schroot(1) program which predated stuff like docker. I went to a Linux tradeshow in London, and the IBM people were showing off their new OpenPower systems. I could see how the LPAR hardware virtualisation could be utilised to automatically fire up new VMs and have a really nice and manageable virtualisation setup. Asked them about it, and was told that you needed a separate Windows system with Java client(!) to create and manage VMs. Asked if the specifications were available to manage it using my own tools, and was told no, it was all secret.

They threw away a huge lead because of old practices and tools. Having their tools require manual setup with zero scope for automation beggars belief. I could have integrated direct support for LPARs into my tool. As it is, they lost a sale of some hardware along with the creation of Linux-specific support for it. They missed a lot of opportunities to sell what they had, which was really good hardware; seems so short-sighted.